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How to Lower e-Discovery Costs

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CIOs can work with legal and records management to more effectively manage growing data stores and help contain soaring legal expenses.

Currently, there are an estimated 2.7 zettabytes (1 ZB = 1 billion terabytes) of digital data stored around the globe—a 48 percent volume increase from 2011. At this rate of growth, the global volume of stored digital data will reach 8 ZB by 2015.¹

In a litigious world, such massive data stores present a formidable challenge to some enterprise legal departments: The more data a company has in active storage, the more data it will need to review during the discovery phase of legal action. Thus, for many companies, the “e-discovery” process is becoming increasingly costly. The Rand Corporation estimates that reviewing digital documents during discovery to determine relevance, responsiveness, and privilege can cost $1,800 to $210,000 per gigabyte.²

“This is a growing problem,” says Sean Riley, a principal at Deloitte Financial Advisory Services, LLP. “Because many companies have poor information management practices, they are hanging on to a lot of data that should be dumped. Reviewing all these documents in discovery is taking much longer—and costing much more—than it should.”

In this article, the first of a two-part series, we examine how, by working closely with the legal and records management departments, CIOs can manage data more effectively and lower e-discovery costs. Says Riley, “You can’t stop data growth, but you can manage it in ways that may make discovery easier and save your company money.”

A lack of collaboration among the legal, IT and records management teams often contributes to data management dysfunction. For example, some CIOs may be unaware that e-discovery poses any challenges at all.

“Discovery costs often come out of legal’s P&L, so the CIO doesn’t typically know how much the company is spending to review data.” he says. “Meanwhile, records management functions are typically underfunded and cannot implement or support effective records retention processes.”

Riley says that CIOs can address these and other e-discovery challenges by taking the following steps:

Understand discovery costs. While CIOs may not normally count e-discovery costs among their top budgeting priorities, many CFOs currently view them with rising concern, says Riley. “As CIOs begin to address this issue, a conversation with the CFO about the actual cost to the legal department of e-discovery is a good place to start,” he says. “The CFO probably already has cost reduction targets in mind that can inform future data management strategies.”

Build collaborative bridges among IT, legal, and records management. According to Riley, in many companies records management and legal routinely work together to determine which data must be retained, and to create retention schedules. Unfortunately, their recommendations are often overlooked or are ineffectively executed. “What’s missing in these efforts is IT,” he says. “CIOs should strive to build collaborative bridges with these two groups to establish and implement goals and guidelines for managing data consistently.”

Bring IT into alignment with records management guidelines. IT can next develop a strategy for implementing data management guidelines in the context of the enterprise’s broader information management architecture. Achieving the goals set forth in the guidelines could involve relatively simple adjustments such as putting limits on how long individuals can retain email messages. “Working with legal and records management, IT can also create an internal process for identifying new data and categorizing it in ways that will make future e-discovery efforts less time consuming,” he says.

Planning for the Future

Riley says that to consistently manage data effectively, CIOs should view all prospective technologies with the goal of containing e-discovery costs in mind.

“As they make decisions on new platforms and technologies, they should understand how any new systems might affect data management processes. In fact,” he adds, “the CIO should consider including someone from records management in the oversight group when new data management technologies are being assessed.”

Next up: In part two of this series, we will identify three steps CIO can take now to prepare enterprise data for future lawsuits.

How to Lower e-Discovery Costs

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